DESPITE its commercial natural gas endowment, Nigeria has not yet recorded significant utilisation of Liquefied Natural Gas, LPG. In this interview with Udeme Akpan and Ediri Ejoh, The Vice President of NLPGA and managing director/CEO of Banner Energy, Mr. Nuhu Yakubu, who spoke on a wide range of issues, canvass for the rapid development and utilisation of LPG in the nation.
Why are we discussing LPG at this time?
We are discussing Liquefied Petroleum Gas, LPG because it is the best thing that can happen to this country at this time. We have been talking about LPG for a very long time. We have to discuss it again at this year’s annual conference of the Nigeria Liquefied Petroleum Gas Association, NLPGA because of its importance to the nation.
Do we have adequate supply?
Yes, we do. Nigeria is a net exporter of LPG. We produce more than five million metric tones of LPG per annum and we are exporting over four million metric tones. Nigeria only consumes about 500,000 metric tones when we have the capacity to consume five million tones. The LPG market is a $10 billion industry with many multiplier effects, including employment.
What are the issues affecting adequate supply and demand of LPG in Nigeria?
There are many issues affecting demand and supply of LPG. These include inadequate infrastructure, especially gas cylinders and tankers required for storage and movement of the product from one place to another respectively. We also need qualified and experienced personnel to enhance LPG operations in Nigeria.
How are you working with other stakeholders to tackle these and other issues?
We are working with the Federal Government. We appreciate the fact that this government is listening. For instance, the government has appointed one of our members as the program director of LPG. He used to be the President of Nigeria LPG Association. For once, we have seen government put a ‘square peg in a square hole’. Consequently, he understands the issues very well. Apparently because of the robustness of our discussions, the government is thinking of injecting more cylinders into the market because every home in the country deserves to have a cooking gas cylinder. This will go a long way towards tackling energy poverty as well as various health issues associated with the application of dirty fuels.
What should we expect from NLPGA?
The public and all stakeholders should expect things to get better because NLPGA will continue to engage the government in order to address problems that hinder the development and utilisation of LPG. Specifically, we are working to enhance the acceptability and utilisation of LPG which has shown signs of positive change in the last two years.
What are some of the issues that need to be addressed in the LPG market?
We need to work on many issues, especially availability, affordability, acceptability and accessibility of the product. We need functional terminals. The retail side of the business is not growing as fast as it should be because of affordability. The product is not delivered to consumers at the right price because of sharp practices and the bottlenecks at the jetties. Also, we do not have adequate trucks for distribution of the product. There roads are also very bad, thus leading to delayed deliveries and accidents in extreme cases.
What kind of fiscal incentives are required?
The government should provide adequate fiscal incentives, capable of stimulating development in the sector. These should include Value Added tax, VAT and tariff. The government and other stakeholders, especially the banks should also assist investors to access funds at reasonable interest rate.